Hiking Medicaid Reimbursement Improved Access to Doctors. What Happens Now That Payments Have Plunged?

It was a classic bait and switch on the American public


DoNotLick / Foter

It was a classic bait and switch.

To increase the ranks of Americans with health care coverage, the Affordable Care Act relied in part on expanding the rolls of Medicaid patients around the country. To make that an even slightly credible policy proposal, there had to be doctors ready and willing to see the influx of taxpayer-subsidized patients. But notoriously low Medicaid reimbursement rates were known as something of a doctor repellent. What to do? How about improving reimbursement to providers? And that's what the federal government did—for two years. A recent study says it worked too, improving Medicaid patients' ability to get appointments.

Which raises some questions about what will happen to those new enrollees and their access to doctors, now that the two-year federal boost is over and Medicaid in most states has reverted to paying the old rock-bottom rates.

The study, published in January in the New England Journal of Medicine, found that "availability of primary care appointments in the Medicaid group increased by 7.7 percentage points, from 58.7% to 66.4%, between the two time periods. The states with the largest increases in availability tended to be those with the largest increases in reimbursements, with an estimated increase of 1.25 percentage points in availability per 10% increase in Medicaid reimbursements."

That would seem to demonstrate that basic economic laws are still in effect; if you're willing to pay more for something, you can get more of it. But As of January 1, 2015, physicians are seeing "an average 42.8 percent reduction in fees for primary care services," according to the Urban Institute. Some states are making up all or part of the fee bump, but that's a big chunk of change, and the money isn't readily at hand—especially since the patient pool (with related costs) was deliberately expanded by increased enrollment in Medicaid. States already found the program to be gobbling up unaffordable chunks of their budgets. So…now Medicaid is paying less for medical services. And the laws of economics are a little harsh, supply-wise, when that happens.

Note that "increased" access to appointments was also a relative improvement. When the Inspector General for the Department of Health and Human Services went checking last year on the availability of appointments under Medicaid managed care programs "We found that slightly more than half of providers could not offer appointments to enrollees. Notably, 35 percent could not be found at the location listed by the plan, and another 8 percent were at the location but said that they were not participating in the plan. An additional 8 percent were not accepting new patients."

NJ.com has an interesting take on what Medicaid can be like for that flood of new enrollees who find themselves with health care coverage, but not so much actual health care. It discusses the ordeal of Justin Holstein, who suffers from chronic migraines and spent a year on New Jersey's version of Medicaid.

"You have a card saying you have health insurance, but if no doctors take it, it's almost like having one of those fake IDs," he said. "Your medication is all paid for, but if you can't get the pills, it's worthless."

You know who doesn't take Medicaid? Holstein's father, a psychologist. The government program pays too little.

"I'm still listed as participating, but I no longer take patients," he said. "I won't."

Expanding health care coverage via Medicaid and temporarily boosting the availability of providers willing to see patients through the program was bait for a voting public looking for an easy fix. Now, though, we get to see the switch.

Note: My wife is a pediatrician who sees many Medicaid patients as part of her practice in rural Arizona. She anticipates a roughly 30 percent drop in reimbursement for them.

NEXT: Ronald Bailey Debunks New Minimum Wage Hocus Pocus

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  1. There's nothing that can't be solved by throwing lots of money at it. For instance, if you see a pothole, just fill it with hundred-dollar bills.

    1. If only that would work with my mother-in-law.

      1. Are you filling her orifices with money? It's all about filling holes.

  2. I just spent 8 hours in the ER yesterday. One of the more awful experiences in recent memory. And this was at a "high end" hospital.

    All of the things that Obamacare was supposed to do? It does the exact opposite. Anyone that says otherwise is a fucking liar.

    I'm looking at you, Buttplug.

    1. I told you not to stick that in there.

      1. I learn things the hard way

      2. Look, no hands!

      3. Seriously though, ER (or even hospital) visits please, those are traumatic experiences. They make you wait SO MUCH.

      4. They put the cooling fan in an... unfortunate location.

  3. What happens now? An Executive Order defining and establishing punishment for Hoarding, Wrecking, Bourgeoise Counterrevolutionary Activity and Kulakism in the healthcare industry. That's what.

    1. First, enslave all of the doctors. They're wealthy or upper middle class, anyway, so that's morally okay.

    2. Take away the medical associations involvement in medical licensing. It's ridiculous that existing doctors essentially get to vote on how many competitors will be allowed.

      1. You think that's bad, do you know who regulates lawyers?

  4. Socialism always works great until you run out of other people's money.

    1. Socialism always works great* until you run out of other people's money.

      *If you ignore all the bad effects and warning signs, and if you constantly redefine the definition of success until it is essentially meaningless.

      Seriously, every socialist society has all kinds of really atrocious externalities that get ignored, whitewashed, or just blindly accepted.

      1. Well what about the externalities of capitalism? What about them? No one ever talks about them!

  5. "So...now Medicaid is paying less for medical services. And the laws of economics are a little harsh, supply-wise, when that happens."

    If you're a provider, you make up for the difference by gouging private pay patients for the difference.

    Some of the other things you can do as a doctor?

    a) Join a private insurance group that insulates you from seeing out of network (Medicaid) patients.

    b) Shut down your inner city practice (where the people are poorer and the percentage of people on Medicaid is higher), and open a new practice in a more affluent, more suburban demographic.


    Yeah, not only does Medicaid increase the cost of buying private health insurance, over the long run, it also decreases the availability of healthcare to the poor. Medicaid was already chasing hospitals and emergency rooms out of our inner cities--and now that they've expanded Medicaid, there's no reason to think the impetus for that hasn't become proportionately worse.

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